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Financial Tips: 5 Ways To Save Money While Paying Off Debts

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How do I save Money while also Paying off Deb? Having debts can be one of the biggest problem to your financial future, and having more debts can hinder your saving plans as well as other goals.

How do I save Money while also Paying off Debts? This is one of the top concern for many people who wants to save money but at the same time wants to get rid of their debt.Having debts can be one of the biggest problem to your financial future, and having more debts can hinder your saving plans as well as other goals.

So the question comes. How do you save money while also paying off debt?Here are 5 ways on how to save money while also paying off debt.

1. Create a Debt Repayment Plan

You need to create a debt repayment method if you are serious about getting rid of your debts and keep on saving. Getting rid of your debts requires you to have a certain plan first.Lots of people are not following any particular debt repayment plan. But having one is the best choice.

You may have to choose between these two method which works for me or you may find another which seems good for you too.1. Paying off the lowest debt balances first.2. Paying off the highest interest debts first.

But for me, I always stick with the first option which is the debt-snowball method which is popular and is suggested by many personal finance experts. Since you’re paying off the lowest balances first, it allows you to celebrate quick wins.

Choose the one that works best for you. Because having a debt repayment plan is great and can keep you focused and motivated.

It looks something like this:

Step 1: List your debts from smallest to largest.Step 2: Make minimum payments on all your debts except the smallest.Step 3: Pay as much as possible on your smallest debt.Step 4: Repeat until each debt is paid in full.

Here’s an Example of Paying off the lowest debt balances first

2. Reduce and Track Your Spending

This is a very important step towards improving your finances in any capacity. When you track your spending's, you will be able to get a clear picture of where your money goes.As for me, I didn't know the importance of tracking my spending just because I wasn’t making a lot of money. But by the time i decided to track my spending I realized lots of money leaks I had in my everyday spending.

If reach your financial goals, the you have to make it as a priority, because tracking your spending is important.

You may create a simple spreadsheet and add all you daily spending and at the end of the month you will realise which expenses you need to reduce which are not important.

3. Set Your Goals

Always, you need to have Goals. Lets say your goal is like this “I’m going to save $1,000 a month into a dedicated savings account for purchasing a new car“.Remember, your goal doesn’t have to be for purchasing a car, its can be for a vacation or something else. It can be any number of things saving for retirement, or an emergency fund.Having a clear goal makes succumbing to temptation less likely.You’re better able to resist the urge to buy those half priced clothes at the mall when you have a goal to reach.

4. Develop a Consistent Savings Habit

The best way to make sure you don’t go into more debt is to have savings. Having saving comes from developing a consistent habit of saving.Automating your finances gives you peace of mind.You know you’re saving money but you don’t have to worry about manually going in and doing it.Set up a regular habit of saving to a dedicated savings account. It doesn’t have to be a lot of money. But the importance is developing a habit of saving consistently.

5. Increase Your Savings Rate

One of the best things you can do to save money while also paying off debt is to increase your savings rate.Although its easier said than done, right?Increasing your savings rate is best done through finding ways to make extra money. While cutting expenses can be great, I’m pretty sure you have already done most of the legwork for it. Now it’s time to focus your efforts on increasing your income.Start small and look into ways you can make your first $100 or $500 in extra income.From there, think about ways you can scale your extra income efforts.For me, blogging has been one of the best side hustles I’ve had so far. I started a blog as a way to inform and entertain people but it ended up into something more. There are several income streams you can create from a blog.

As I grew my blog, I started to let go of short-term side hustles I had been doing. I used my blogging income to help build my emergency fund and save for one of the things I love most: travel.Although, getting a promotion or pay raise at work can be great, but it isn’t always a possibility.A side hustle is key to increasing your saving rate.

Final WordIt can be tricky figuring out how to strike a balance between paying off debt and saving money.

Developing a savings habit is important while paying off debt. It can cover unexpected expenses that pop up like car repairs, work-related stuff, or medical costs.